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August 2014

Changes in exemption procedure for SEZs

By Tarun Ghia, Pratik Mehta, Brijesh Cholera Chartered Accountants
Reading Time 2 mins
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Notification No. 07/2014-ST dated 11th July, 2014

Services provided to developer of or unit in SEZ are exempted by adopting certain procedure laid out in the principal Notification No. 12/2013 – Service Tax, dated 1st July, 2013, vide number G.S.R. 448 (E), dated 1st July, 2013 and amended by Notification No. 15/2013-Service Tax, dated 21st November, 2013 vide number G.S.R. No.744 (E), dated 21st November, 2013.

In order to remove certain time delays and simplify certain benefits, Notification No. 07/2014 makes following amendments in the earlier notifications:

(a) Central Excise Officer would issue Form A-2, within 15 days from receipt of Form A-1;

(b) Exemption would be available from the date when list of services on which SEZ is entitled to upfront exemption is endorsed by the authorised officer of SEZ in Form A-1, provided Form A-1 is furnished to the jurisdictional Central Excise Officer within 15 days of its verication. If furnished later, exemption would be available from the date on which FormA-1 is so furnished;

(c) Pending issuance of Form A-2, exemption will be available subject to condition that authorisation issued by the Central Excise officer will be furnished to the service provider within a period of three months from provision of service;

(d) For services covered under reverse charge, the requirement of furnishing service tax registration number of service provider shall be dispensed with;

(e) A service shall be treated as exclusively used for SEZ operations if the recipient of service is a SEZ unit or developer, invoice is in the name of such unit/developer and the service is used exclusively for furtherance of authorised operations in the SEZ.

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